Sufficient tax

[ruasonid]

I've seen this phrase on several pension Websites with no further explanation.

"You must pay sufficient tax at the higher/additional rate to claim the full tax relief via your tax return"

Meaning?

[Kenny@MyAccountantFriend]

To claim relief at 40% your gross earnings have to be within the 40% tax bracket.

This is due to the gross pension contributions increasing your basic rate tax band by the amount if the contributions made.

If you are not a higher rate tax payer you would not get relief at 40% but would still receive the 20% grossing up on the contributions made for the basic rate threshold.

[ruasonid]

Thanks, so it means income over the increased basic rate band (as a result of gross pension contribution), which would be taxed at 40%, would qualify the pension contribution for relief at 40%.